ZacksResearch's Commentaries
Nov
10
2009
Red Robin Gourmet Burgers (RRGB) - Bear of the Day
by ZacksResearch
Overall Rating:
Red Robin Gourmet Burgers (RRGB) is vulnerable to economic headwinds, and we believe that the stock will continue to underperform the restaurant industry. Impeding the growth is its sagging same-store sales and declining traffic counts.
The company's third-quarter 2009 same-store sales fell 14.9%. The chain expects guest counts to remain negative, and expects restaurant-level operating margins to decline by 150 to 160 basis points in fiscal year 2009.
In addition, more than 50% of total restaurants are located in areas, which have been hit hard by the housing downturn and economic slowdown. This may dampen the company's growth potential.Zacks Investment Research
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